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Indicators of Development

By: Dr Sachidanand Sinha
The primary aim of generating indicators of development, defined in varying terms, is to generate information in quantitative and qualitative terms, to critically examine who gets what, where and how.

During the recently concluded parliamentary elections one heard a lot about the ‘Gujarat model’ of development and governance. In the past there has been a lot of debate about the ‘Kerala model’. Now, what are the factors that comprise the Gujarat and Kerala models of development? We know reasonably well that over the decades Kerala has done much better on the social front than other Indian states. It has attained near 100 per cent literacy and has the lowest infant mortality rates (IMR) in the country. According to some comparative studies, Kerala’s IMR was found to be even lower than that of the non-white population of the United States of America. But, there is lack of clarity with regard to the ‘Gujarat model’. The Raghuram Rajan panel (2013), which submitted its report to the Finance Ministry on composite development index of states, has placed Gujarat at 12th rank among the states. Haryana, Kerala, Tamil Nadu, Maharashtra and a few others are placed higher than Gujarat and have been categorised as relatively developed states. The panel arrived at the composite index of development on the basis of ten indicators which were chosen with the objective of facilitating allocation of funds to the states by the central government.

The above example raises the question, what an indicator is and how is it arrived at? Ideally indicators measure the state of and changes over time in major aspects or dimensions of socio-economic conditions. Essentially, indicators are a statistic which facilitates concise, comprehensive and balanced judgments about the condition of a society. In a nutshell, indicators help appraise the impact of effort made in society in order to find out where citizens have been, where they are, and where they are likely to go. Normally, indicators are a function of at least two variables. For example, density of population is an indicator and is a function of two variables—population and area. Thus two districts or localities with similar population size but different area differ from each other in population density. Population size and size of a district/state/locality are variables that change over time and space and reflect certain characteristics of social, economic or political attributes. For example, education is a social attribute, enrolment is a variable and gross enrolment ratio is an indicator. By taking the size of enrolment alone we cannot say as to whether every child in the school going age is enrolled or not.

Our concern here is to understand indicators that can measure development. But how does one define development? Development has been defined variously by scholars and there has been little convergence of ideas and perspectives among them. According to Mahbub ul Haq, a noted economist and human development theorist, development goals must be defined in terms of progressive reduction and eventual elimination of malnutrition, disease, illiteracy, squalor, unemployment, and inequities. The gross national product (GNP) though important, is no longer regarded as the main objective or index of development. Empirical studies of the sources of growth in output have demonstrated that much of the increase in aggregate production over a long time cannot be explained by an increase in only the standard physical inputs of the factors of production. Hence scholars have moved beyond GNP or the gross domestic product (GDP) as the indicator of development to include a wide range of indicators of social, environmental, cultural, and political import.

Development is multidimensional and includes a wide array of attributes such as agriculture, industry, trade and commerce, income and consumption, education and health, human rights, and peace. The popular world bank development indicators comprise agriculture and rural development, aid effectiveness, climate change, economy and growth, education, energy and mining, environment, external debt, financial sector, gender, health, infrastructure, labour and social protection, poverty, science and technology, social development, trade, and urban development. Since 1990 the United Nations Development Programme (UNDP) has been annually bringing out human development reports which, along with the regular feature of human development index (HDI), takes up different aspects of development each year and attempts to examine their relationship with HDI. The HDI is an attempt at measuring deprivations in outcome of development processes, which is based on earlier work on measuring the condition of the world’s poor by Morris D Morris, professor of sociology and comparative study of development (emeritus) at Brown University, Seattle.

The HDI is based on three outcome attributes, namely longevity, access to knowledge and income/consumption (measured through purchasing power parity-PPP). These reports have been an important source of engagement internationally as well as in India. It may be noted that on the initiatives of the UNDP and Government of India, most of the states have been periodically bringing out HDI at the district levels. In the past, the Indian government attempted to examine and formulate appropriate policies in order to tackle the problem of regional backwardness. Several committees and their advices were harnessed through a set of development indicators. Table 1 presents a synoptic view of the indicators of development.

Table 1: A Comparative Profile of Indicators of Development Suggested by Various Committees on Regional Backwardness.

Development signifies qualitative change over time. The central object of development is to create favourable conditions so that individuals can access various opportunities without any discrimination, bias or favour. These opportunities could extend from access to reasonably good quality education and health care services, to freedom to choose sources of livelihoods, protect one’s culture and environment and all that which may enable a person to enjoy freedom to live a life of fulfilment. While satisfaction of one’s needs and wants may constitute a set of tangible opportunities, there may still remain a large set of attributes which can hardly be measured in quantitative terms.

International Labour Organization (ILO) identified a set of basic needs indicators that could inform government policies in creating opportunities for citizens. These are causal and process indicators pertaining to access to basic needs such as health, education, water, sanitation and housing. It is important to note that the basic needs indicators are supply driven as it is presumed that every human needs good health, safe water, sanitation and education. Access to these basic opportunities is likely to enhance demand and consequently growth in the economy. It is well established that a healthy and educated person contributes most significantly to economic productivity and social life. Thus in economics, human capital /manpower perspectives developed, where human beings were seen as an important factor of production. Over the years it has also been realised that the quality of human life measured variously is not just a means of development but an end in itself.

Jan Drewnowski, a noted economist, suggested two interrelated indices of well being—state of well-being and levels of living (J Drewnowski, 1974, ‘On Measuring and Planning the Quality of Life’, Mouton, The Hague). The former measured the state of social well being as a cumulative outcome of all that a person has consumed over time; the level of living measured current level(s) of consumption with reference to a number of indicators (Table 2). Drewnowski went a step further in suggesting that well being or development was not only about receiving benefits but also about contributing towards it.

Table 2: Drewnowski’s State of Well-being and Level of Living

Amartya Sen, famous economist and Nobel laureate from India, one of the most critical thinkers in the contemporary times, has taken the debate of development much beyond the precincts of HDI in order to address what he along with Martha Nussbaum, an American philosopher, call the capability approach. The capability approach is a broad normative framework for the evaluation and assessment of individual well-being and social arrangements, the design of policies, and proposals about social change in society. Its main characteristics are its highly interdisciplinary character, and the focus on the plural or multidimensional aspects of well-being. The approach highlights the difference between means and ends, and between substantive freedoms (capabilities) and outcomes (achieved functioning). The capability approach thus brings in a whole range of discourse on freedom, justice and inequalities.

The development profile globally and nationally is underlined by wide social and spatial inequalities. It has been established beyond doubt that growth does not automatically trickle down as there are strong socio-economic and geographical or territorial (spatial) constraints that need to be included in the development discourse. Aggregative indicators of development must be supplemented by socially and territorially disaggregated indicators that could help understand the dynamics of development (or underdevelopment) better. For example, one can say that India has made good progress in the field of educational enrolment at the primary stages, but it is also true that there are social groups such as the scheduled tribes and castes who in spite of having registered increase in enrolment stand way behind the average enrolment rates. It is even more disturbing to note that enrolment rates for girls belonging to certain social categories living in the rural and inaccessible parts of the country is even more depressed. The primary objective of development indicators, as it may vary depending upon the context, is to generate and innovate information both in quantitative and qualitative terms to critically examine who gets what, where and how.

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